Friday, October 15, 2010

Earning and burning points on the new American Express Gold Rewards Card

This is the second blog post of my three part series on the new American Express Gold Rewards Card that was introduced to the Canadian market at the start of this month. As mentioned in my first post, American Express has asked me to test drive this new card and in return they offered me 50,000 points to experience the earning and redemption process with the card.

One of the main things I have found valuable about the card is the ease and value of the Membership Rewards points earned. A large portion of my credit card spend is on everyday purchases at gas stations and grocery stores which have the accelerated earning of 2 points per dollar. A recent Angus Reid survey revealed that 24% of Canadians spend $10,000 and $15,000 per year on Gas Stations, Grocery and drugstore purchases which all fall under the earning ratio of 2 points per dollar with the Gold Rewards Card. For me this earn ratio will allow me to rack up a lot of points over and above what American Express awarded me for trying the card, allowing for a greater redemption. Add to this the 2 points per dollar on all travel purchases which according to the survey fits in nicely with the 89% of Canadians who take one or more vacations a year.

While I have not booked a trip yet with the points awarded to me, you may recall that we were toying with using either a points transfer to Aeroplan or the TripFlex option that allows the cardmember to book travel anywhere and then redeem points against the charge on your statement up to 12 months later. What my family and I have decided however is where we are going to go and what redemption option we are going to use. We have decided to take our kids to Beaches Turks & Caicos in the New Year and will be using the TripFlex redemption. Going this route allows us to pick the exact date that works for us, the flexibility to pay for the fees and taxes with points and allows me to comparison shop online and then book with the provider that offers the best pricing

Another plus of using the TripFlex option is that I don’t have to have all the points at the time of booking and continue to collect for the trip after I book. In fact holders of the Gold Rewards Card actually have up to 12 months after the travel booking is posted to their account to redeem points against the charge. This restriction-free redemption is not only important to me but it is the most important factor that Canadian consumers look for when choosing a rewards program according to the Angus Reid survey. Over and above all of this, I will earn double points on the vacation purchase and can continue to earn points on my everyday spend on the Gold Rewards Card and then redeem those points towards this vacation to bring the cost down even more. Should I choose, I don’t have to redeem these extra points on the travel and save them up for future travel like nearly a quarter of Canadians who keep banking their miles and points. One thing members of other rewards programs may have to watch for is miles or points expiry but with the Membership Rewards Program this is not an issue as the points never expire.

I am going to continue to use this card up to my third blog post and more then likely will continue to use it after as it will replace my American Express Blue Sky Credit Card (another very good travel rewards card). The third blog post will be a complete review of the credit card in the typical Rewards Canada fashion that we have used since the start of this year.